The Traveller, the Agent and the Budget Airline.

I had dreamed of travelling around Vietnam for many years. Sailing

Halong Bay, riding sleeper trains into the deep north, sipping coffee in
Hanoi and crawling through war tunnels. The only small hurdle to this
vision of lazy independent wandering was that I was no longer a solo
backpacker. My travelling entourage now included my wife and two kids
aged 13 and 11. Still, when the travel siren calls I must act, so the plan
quickly morphed. I would don my old backpack, pack up my family and hit
the road, spending less time in dorm-bed hostels than I had once
envisaged.

But from the first childs scream, when immunisation needles were
mentioned, my travel quest was under immense pressure. While I knew
needles could be navigated, the unavoidable threat was that the cost for a
family of four could become a trip-killer, the difference between Ho Chi
Minh and Homestay. So I began the R & C shuffle research and
compare; a scan for the cheapest flights, with an optimistic peak season
budget of $1,000 return per person.
My two departure airport options were Queenslands Brisbane and the
Gold Coast. The Gold Coast is my local one and as Australias fastest
growing airport, is serviced by budget airlines Scoot, Air Asia and Tiger, as
well as Qantas, Jetstar and Virgin. To go from the local strip would be a
time boon, because when travelling with kids, I measure travel hours in
door-to door mode. That is the gross potential period for them to turn
into scream-bubbles or act like flapping catfish on the floors of planes and
transit lounges.

My mission clear, I started to wade through a plethora of airline, agency

and flight comparison websites, soon establishing that some renowned
cheapie sites were far better at perception than reality. Booking fees,
surcharges, full price fares as the only option, not to mention the
minefield of auto-added products. On one quote, $456 in travel insurance
was auto-added because I missed ticking one of those little boxes.
I eventually discovered a one grand solution, using five different airlines.
Scoot, Jetstar, VietJet, Vietnam and Tiger. But after many hours in the
google vortex I was still not confident I had all the options.
I decided to go comparison shopping at the local travel agent, hoping that
a qualified person would do the work for me. A recent ABTA report in the
UK states there is a wave of enquiry returning to traditional bricks and
mortar travel agents. The main reason: too many options on the net. I
could see why. The on-line hunt can become a bewildering maze for
anything but the most basic of point-to-point routes. And if anyone places
even a miniscule of value on their time, getting someone to do it for them
is well worth it.
The agent offered me options of full service airlines, all ex-Brisbane, at a
best price of $400 per person higher than my findings. Nothing was
offered on the convenient local-based budget airlines, (the sensitive ones
dont like the word budget and prefer to be called Low Cost Carriers LCCs).
So herein lies the rub. The agents arent offering the budget airlines,
because those carriers dont pay them commission. Yet the traveller goes
to an agent for the comprehensive advice they purport to offer.
I have no problem with travel agents not selling these no commission
fares. After all, what business in their right mind would sell products at
zero mark-up? That is the essence of a wholesaler/retailer business model,
and agents, like any business. should have the right to refuse to sell
airlines that wont pay them. Certainly apple stores dont undercut their
non-apple store retailers. If they did, Myers, Harvey Norman and others
would not distribute apple products through their stores.

Yet this raises the question of customer service for travellers. A travel
agents key attraction is their access to all fares, and their expert
knowledge that quickly provides travellers with the best possible options
to meet their needs. By not offering certain fare types however, agents
are knowingly not doing the best possible thing by their clients.
The budget airlines suggest a solution: that agents are free and even
encouraged to sell their product. They just wont pay for it. Which means
an agent must add on a booking fee, which in turn erodes the agents
mission in providing best price. The LCCs also fail to mention that their
systems are not practical for agents. Most LCCs have a consumer booking
engine which is slow, unique to each of them and time consuming with all
those pesky add-ons; the antithesis of an agent providing efficient
service.
Yet some things are changing. Only recently has it been announced that
Ryanair will start making their fares available on Amadeus, a GDS (Global
distribution system), a centralised reservation system used by agents.
EasyJet and Air Asia have done the same through Travelport. So for their
future growth, these airlines recognise they need agents, but they still
wont pay them. These reservation systems may open up the possibility of
agents offering a service fee, but while these fees are quite common in
the larger Northern Hemisphere markets, the Australian consumers still
resists them.
As an observer, it appears odd that for what would be less than $7
commission on a $100 fare, LCCs see no value in selling through a retail
distribution network of thousands, each site set up at high cost with their
own sales staff, and loyal customers who will listen to recommendations.
In reverse, its their book-direct business model and while none of the
Australian budget carriers have yet scratched a profit, others make up a
big chunk of most profitable airlines in other parts of the world.
From all this, I look at my local Gold Coast City, population nearing
500,000. It has an airport growing on the back of these budget airlines
and is regionally serviced by hundreds of local retail agents that do not
sell these flights. Some may impose a service fee, a few may do the
booking as an add-on service, but the systems are clunky and overall, for
the few that do, it is a begrudged activity.
Yet while theses carriers all continue to report losses, the agents are
sending their own clients to Brisbane airport for departures, even when
they know there are cheaper and more convenient options available. The
city is losing departure sales, taxi fares, and tourism dollars via

inbound/outbound travellers. And the traveller, who continues to indicate

that bricks and mortar people-based travel agents are still sought-after, is
left unserved by them and the carriers. Stand-off.
Is there hope ahead? Metasearch engines, like and Adioso and Google
flight search have arrived; sites that claim to scan almost all on-line
offerings from agents, airlines and other flight search engines. Yet the
adage that no one site does it all remains. A process of research compare
and book (RCB) across multiple sources is still required to know you are
getting the right flight at the right price.
Maybe it is time for the Australian low cost carriers and agents to enter a
hybrid of the traditional relationship. Would a few bucks added to fares
enable agents and LCCs to collectively better service travellers? Would
this price agreement mean price-fixing and be detrimental to the
consumer? According to the ACCC, probably, even though this type of
agreement exists in all industries. Could these Australian carriers get their
product on a GDS to at least simplify the agent process and give them
some rationale to at least charge a fee? And more radically, could the
Gold Coast City recognise the income they lose and contribute towards a
local agent being paid to sell a local carriers product. The current standoff is not working: for the agent, the local budget airlines and most
importantly, for the traveller.
For my own Vietnam travel quest, I ended up booking the five different
airlines direct. It took me hours and days of my own time. Halong bay was
wonderful. The screams of the children as I drove them to the travel
doctor were not. But they were only marginally higher than my own
squeals at having to do all that booking work myself.
By John Ahern, Author On The RoadWith Kids.
Contacts: www.johnahern.co

@johnahernoz

About John: John has an intimate understanding of the travel industry,

being previously the head of mergers and acquisitions for global travel
giant Flight Centre Limited. He has also travelled independently through
over 85 countries and been shot at, poisoned, tear-gassed and been a
passenger on two train derailments.
Johns new travel memoir, On The Road With Kids has been recently
released by Pan Macmillan and featured in an array of media. It tells of the
year he threw in his career and embarked on a year-long adventure across
30 countries in an old campervan with his wife and two kids. More Eat
Pray Love than National Lampoon funny, charming and life-affirming! as
reviewed in the Sydney Morning Herald Traveller Magazine.

John will be presenting his Greatest Travel Tips Ever at the Brisbane
Travel Expo on 21/22 February. www.travelexpo.net.au/travelexpo/brisbane